Assessing Money Laundering Risk of Financial Institutions with AHP: Supervisory Perspective

摘要

This paper proposed a risk assessment model with which supervisory authorities can calculate the money laundering risk (MLR) level of financial institutions and make comparisons among multiple institutions. The model is based on the Analytic Hierarchy Process (AHP) and decomposes MLR into two second-tier criteria, i.e. Inherent Risk & Control Risk. AHP pair wise comparisons made by the experts from various fields are processed through AHP software to get the weight of each factor. Using this model, MLR of each financial institution could be obtained and certain comparison among them could be carried out.